First of all, make sure the daemon compiles and works as expected without S/Key support. Personally, I prefer to keep all of my new software under /usr/local and my log files in /usr/adm. So I applied the following patch
before building the daemon

patch < locations.patch
build nx3
build install

If your old ftpd is in /usr/etc, you'll have to edit /etc/inetd.conf to point to the new one in /usr/local/etc

ftp stream tcp nowait root /usr/local/etc/tcpd /usr/local/etc/ftpd -a

(if you use TCP-Wrappers) or

ftp stream tcp nowait root /usr/local/etc/ftpd ftpd -a

(if you don't) and then

kill -HUP < PID# of inetd >

Now to add the S/Key support.

I'll assume you already have S/Key set up in some fashion or other. Personally, I prefer the Bellcore S/Key package which can be found precompiled for NeXTStep. The main elements are

keyinit initialize or add a user to the /etc/skeykeys database.

login a replacement for /bin/login.

keysu an alternative to /bin/su which uses S/Key authentication.

key a command line key calculator.

Unfortunately, wu-ftpd relies on an "enhanced" version of the libskey.a library, from the Logdaemon 5.6 package. This does not compile straightforwardly for NeXT, so I've compile a QUAD-fat library for you. In fact, I made one (minor) improvement. My version conforms to the RFC 2289 OTP standard, which the original does not.